Lehman Brothers shares rose as much as 9% in New York trading after Korea Development Bank said it was in talks to buy a stake in the fourth-biggest U.S. securities firm.
Min Euoo Sung, Korea Development's chief executive officer, confirmed the discussions Tuesday in an interview in Seoul but said he could not comment further. He headed Lehman's Seoul branch before joining Korea Development in June.
Richard Fuld, Lehman's CEO, is trying to raise capital and sell devalued real estate assets before it reports results in two weeks for its fiscal third quarter, which ended Aug. 31. Analysts surveyed by Bloomberg News on average are predicting a loss of about $1.62 billion and say the New York firm may be forced to write down $3.25 billion of assets. Its shares have plunged 75% this year.
Mr. Min told the Yonhap news agency that Korea Development is seeking to team up with local banks to buy a stake in Lehman, and that the negotiations have been "difficult because of differences over price." A spokesman confirmed the comments.
Mark Lane, a Lehman spokesman, would not discuss the matter. Lehman closed up 0.25%.
